If you are a Paypal user, you would know that Paypal can be a hassle to use because you’re not only getting charged for a flat fee plus a percentage fee but also charged a fee for conversion let’s say if you are transferring US dollars to Philippine pesos. This is not a big deal if the conversion charge is actually close to the exchange rate. Unfortunately, Paypal has its own exchange rate and guess what? It doesn’t have your best interest in mind. As a result, people lose out twice when using Paypal. Sadly, Paypal is not alone, most methods of sending money use similar systems and there’s a lot of fees and outright waste involved in sending funds from one country to another. Interestingly enough, Paypal’s cofounder Peter Thiel is going back into Paypal’s market but this time he’s funding a very innovative technology that seeks to squeeze as much of the added cost of money transfers from country to country. The result is lean, sleek and efficient money transfer machine called TransferWise.
If you have overseas foreign workers or immigrants in your family, you know full well the cost of remittance fees. They get charged with sending the money and often times, you get charged receiving the money. That money could have gone to children’s tuition fees, food, rent and other expenses because those fees add up to quite a bit if you aggregated over a year. TransferWise is quite revolutionary because it raises as many of those fees as possible through an innovative peer to peer currency trading system. The problem with current ways of sending money is that the more hoops your money goes through, the higher the chance that you will get charged a fee. Eventually, those charges end up to be quite a bit that’s why TransferWise is on to something big here because the global money transfer industry is huge. We’re talking about trillions of dollars changing hands every single day. Instead of a large chunk going to transaction fees, that money could be saved and invested to buy food for the table, cars, send kids to college and spend for more important things. It’s a great move for Peter Thiel’s to be part of the six dollar investment which is TransferWise. It would be very interesting how this technology will shape up in the near future. TransferWise is not untested technology, it already successfully transferred $195 million dollars since its founding in 2011.